After the Cook County Board of Commissioners spent several hours on Monday, November 14 discussing and debating the financing of improvements to Superior National at Lutsen golf course, Jeff Brauer, a golf course architect with Sirius Golf Advisors talked about Phase 1 of the proposed changes at Superior National.
An early morning meeting of the Cook County commissioners and the firm it hired to evaluate the Superior National at Lutsen (SNL) Golf Course resulted in an increase in the amount of 1 Percent Recreation and Infrastructure Tax allocated to the golf course, from $1.8 million to $3.1 million.
The Monday, Nov. 14 meeting was called to hear recommendations from Sirius Golf Advisors, which had been hired first to evaluate the golf course and then to create a business plan. John Wait of Sirius gave a quick overview of the most recent business plan, noting that it had been divided into two phases. The first phase is intended to get the “best 18” for SNL—18 world-class golf course holes. “We’ve made some changes to the routing plan and we’re comfortable with those changes. The first phase could be completed by 2013,” said Wait.
One major change, Wait said, was to eliminate the plan to build a new clubhouse. It had been deemed too costly, he said, and instead the plan includes $7,000 for renovation of the existing clubhouse.
Wait then gave the board revised construction estimates. The total for Phase 1 is $3.1 million. Phase 2, which is not planned for the immediate future, is another $3 million, for a total of $6.1 million.
To complete Phase 1, Wait recommended increasing the amount of 1 Percent Recreation and Infrastructure Tax allocated for SNL from $1.8 million to $3.1 million.
Wait said he also recommended paying off the $400,000 of debt service on SNL as soon as possible, calling the county’s assistance on paying the debt service a “bridge loan.” He said, “The county has been gracious enough to provide bridge loans at the start of the season. This would basically be a bridge loan during the construction. We would pay this back,” said Wait.
Wait explained that if Phase 1 is initiated using only the $1.8 million set aside for SNL, which would leave the golf course with $1.4 million of debt service. “That would create a negative cash flow,” said Wait, requiring the golf course to come to the county for a subsidy each year.
Instead, Wait said, if the county funded Phase 1 at the full $3.1 million and refinanced the existing debt, the golf course would not have to come back to the county for “bridge loans” as it has in the past. “With the $3.1 million, it puts us in the position where we could be 95 percent positive that the golf course would not have to come to the county for funding,” he said.
Commissioner Jim Johnson noted that the figures made him nervous and asked Wait to talk about potential economic benefit to the community.
Wait distributed a table outlining the difference between the current economic impact of SNL compared to the projected impact in 2016, when both phases of construction are completed. Based on Sirius Golf ’s analysis, Wait said the improvements would generate at least $243,884 per year in additional revenues to the county, excluding sales tax revenue from tourist spending. Adding that, Wait said, would mean a total impact to Cook County’s economy of $3,360,059 per year.
Johnson asked how many jobs could be created. Wait said 30 construction jobs and 10 full-time, permanent (seasonal) jobs.
“As your consultant, I cannot imagine another project that would bring this kind of economic benefit to the county,” said Wait.
“People give government a bad time, saying government doesn’t create jobs,” said Commissioner Johnson. “We have an opportunity here to create jobs.”
Commissioners Sue Hakes and Fritz Sobanja recalled that the golf course was going to seek funding from other sources. “What about obtaining some of this from other sources, so the county isn’t on the hook for all of it?” Sobanja asked.
Golf Course Manager Bob Fenwick answered, “We’ve been waiting to get the final routing, which we have here today. Once we have the county’s commitment, I think we’ll have a better plan to take to funding sources.
“I, for one, want to do this with as little debt service as possible so there is no concern about this falling back on the taxpayers,” added Fenwick.
Hakes expressed frustration that the golf course plans—and costs—seem to keep changing. She said the increase from $1.8 million to $3.1 million is a significant difference.
Wait said the $1.8 million estimate for golf course improvements did not come from Sirius Golf. He said the estimates given by another group were not realistic numbers, an opinion echoed by Jeff Brauer, a golf course architect. Brauer said, “The $1.1 million for irrigation? Basically that estimate was 50 percent too low.”
Sobanja said, “We’ve got this pot of money. We all know none of this was set in stone. …I have no qualms about making this decision contrary to the $1.8 million that we talked about. Those were just numbers to look at.”
There was discussion about other golf courses in the region. Commissioner Sue Hakes noted that other golf courses— Giants Ridge and the Wilderness, for example—have similar numbers of golfers. “How will $6 million get us more if those golf courses—which are so much better— are not getting more golfers?”
“We are competing quite well with Giants Ridge with an inferior product,” said Wait. “I feel we can get more business when we are on the same level as Giant’s Ridge or the Wilderness.”
Commissioner Sobanja asked how Cook County would get golfers to come here, since we are so remote. Wait said in marketing, the best thing to do is to turn a negative to a positive. Wait suggested adding the drive to SNL to marketing materials with a catchphrase such as “One great drive…leads to another.”
There was considerable discussion about the use of the 1 Percent Recreation and Infrastructure Tax and it was agreed that the county board should take some time to evaluate what has been spent and what projects are still seeking funding.
Finally, a motion was made by Commissioner Sobanja to grant an additional $1.3 million to Superior National at Lutsen to be used on Phase 1 improvements. Commissioner Bruce Martinson seconded and the motion passed with Commissioner Jim Johnson also voting yes. Commissioners Jan Hall and Sue Hakes voted no.
George Nelson, who donated land to build Superior National, thanked the board. “It’s like you’re putting equity into a new project. You’ll see promotion and publicity beyond what you can believe. You’ve made the first step and it will all fall into place,” he said.
Leave a Reply